Nicole Salimbeni, Partner, Financial Services and Consumer Business Leader, PwC comments on achieving more accessible advice for consumers, plus what an ideal financial advice system looks like.
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What does ‘more accessible financial advice’ mean to you? And how can it be achieved?
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For me, it means that everyone in the community has the ability to access high quality and timely advice and they can access financial advice through different channels, including face-to-face as well as digital platforms. As to how this can be achieved, I think there are a couple of critical factors.
Firstly, the regulatory framework underpinning how advice and information is provided to consumers of financial services needs to enable greater accessibility. The current regulatory framework is complex, can be open to interpretation, translating to lengthy advice documents that are legalistic, and an advice process that sees onerous documentation requirements.
Secondly, technology will play a significant role in enabling simplification of the end-to-end advice process through digitisation of client files and automation of parts of the process. Moreover, technology will be key in creating a customer experience that allows customers to understand more complex strategies, disclosure and their impacts on their personal circumstances.
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What are you seeing in the market today with advisers/consumers/the community that indicates the need for advice?
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There’s no doubt that given the current state of the world and economy through COVID-19, there are some clear triggers for the need for advice within the community. For example, changes in the markets, the loss of jobs, changes in lifestyles, the need to access funds from super early are just a few examples of what I have observed in the markets. I think more broadly there has always been a need for financial advice in Australia due to our superannuation system. The point at which super members transition to retirement or are preparing for this stage has also typically resulted in demand for advice. In addition, the complexity in our financial system (e.g. tax and super) can also make it difficult for people to navigate and manage their finances which is also another factor that can create the need for advice.
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What does an ideal financial advice system look like to you?
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A system that is simple enough for all Australians to understand coming from diverse backgrounds and cultures. This would mean full transparency about what information or advice can be obtained, how they can be obtained and the cost of those services. The types of advice services need to be tailored and fit for individual needs (e.g. one-off strategic advice versus ongoing advice). Advice would also be quick to get in the hands of consumers and be implemented, compared to what we see today.
From a licensee perspective, I’d see integrated technology solutions and digital platforms forming the architecture for how advice is provided. This would use automation to reduce the amount of documentation that needs to be produced, and reduce the information required from the customer based on data feeds that could be integrated from other product providers (as an example).
The regulatory framework underpinning the system should be unambiguous about what is required and how compliance can be achieved. There would be consistency across the industry about how requirements are interpreted and applied in practice across advice licensees. Again, technology would be used to automate compliance reviews, and there would be use of real time predictive key risk indicators across a range of data to identify areas of high risk with a focus on prevention.
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OPINION PIECE - by Nicole Salimbeni, Partner, Financial Services and Consumer Business Leader, PwC.
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